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Monday, December 6, 2004

Trans States Considering CRJ 700s For New Unit

As Trans States takes the initial steps to form a new airline to fly larger regional jets, the long-time operator of Embraer [ERJ] aircraft is giving serious consideration to flying the Bombardier [BBD] CRJ 700.

Privately held Trans States Holding has filed a pre-application with the Federal Aviation Administration (FAA) to start a new airline, New Corp Air. It will be a separate company under the holding company with its own set of operating officers, said Bill Mishk, the carrier's spokesman.

The mission of the new airline will be to fly aircraft larger than 50 seats. "It will allow us to grow with some of our existing partners while remaining in compliance with our existing contracts," he said.

Trans States, which was first formed to provide regional feeds to Trans World Airways, now has code-share relationships with American Airlines [AMR], United Airlines [UALAQ] and US Airways [UAIRQ]. The scope clause between American and the Allied Pilots Association (APA) strictly limits the number of 70-seat RJs that any American Connection carrier, including American Eagle, can fly. Both United and US Airways have regional partners flying 70-seat aircraft.

"We believe we have some excellent opportunities to place the aircraft with some of our existing partners," said Mishk, without specifying which partner.

Both United and US Airways are operating in bankruptcy. While the long-term future of neither carrier is clear, US Airways is struggling to craft a new business plan to avoid liquidation.

Another opportunity has come along since New Corp Air began discussing its deal with the unnamed partner, he said. United has invited 10 regional carriers to submit bids to fly the routes currently flown by Air Wisconsin (CRAN, Nov. 15). United has set Dec. 10 as the deadline for any proposals.

While the carrier has considered flying a 90-seat RJ, Mishk said, "for us the best opportunity in the next stage of growth lies in the 70-seater." At the Regional Airline Association annual meeting, Trans States CEO Rich Leach spoke of a desire to order a 70-seat RJ next year (CRAN, May 3).

Trans States has reviewed proposals from both Bombardier and Embraer, but it has not made a decision.

"When you consider the total package, the CRJ 700 is a more attractive airplane. It is not just the acquisition, but the operating economics of the plane appear to be very favorable," Mishk said.

Trans State's fleet consists of 48 ERJ 145s and 25 Jetstream 41s.

The plane order and the application for New Corp Air will take place on parallel paths. While it is undetermined which entity will place the aircraft order, Mishk said that the new carrier would own the planes. Trans States anticipates submitting a formal application for New Corp Air within the next 60 days.

>>Contact: Bill Mishk, Trans States, (314) 222-4300.<<


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